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Medtronic acquires Italian firm in $350 million deal

MCT
1:48 p.m. CDT August 27, 2014

Medtronic Inc. corporate headquarters campus is seen Aug. 24, 2010 in Fridley. Medtronic is known primarily as a seller of medical devices, but a $350 million deal announced Wednesday shows the massive company wants to start treating patients directly.(Photo: AP)

Medtronic is known primarily as a seller of medical devices, but a $350 million deal announced Wednesday shows the massive company wants to start treating patients directly.

The Fridley-based company said it would acquire Italian firm NGC Medical S.p.A, of Tolochenaz, in a deal that values the comapny at $350 million. NGC's business is managing cardiovascular suites, operating rooms and intensive care units in hospitals in Italy, with plans to expand across Europe, the Middle East and Africa. Medtronic already held a 30 percent stake in NGC.

The NGC deal was the second acqusition Medtronic has announced in two days. On Tuesday, the firm said would pay $200 million to acquire the privately held Dutch company Sapiens SBS, which is developing a next-generation device that delivers mild electric shocks to the brain to control symptoms of neurodegenerative conditions like Parkinson's Disease.

More controversially, Medtronic is pushing ahead on a massive $42.9 billion bid to acquire Dublin-based surgical supplier Covidien in an inversion deal that would move the combined company's legal headquarters to Ireland, where taxes are one-third the U.S. rate of 35 percent. Such deals have been criticized as unpatriotic by the Obama Administration, which is researching ways to tweak the U.S. tax code to make them less attractive.

But even as the company races to expand its product lines through acqusitions, Medtronic chief executive Omar Ishrak has said that providing overall "solutions" to patients, rather than just individual products, will be a key strategy in the future. Boston Scientific, another large devicemaker with a significant workforce in Minnesota, has announced a similar focus.

The move is a logical one for devicemakers in an era when healthcare reform and a ballooning national deficit are creating huge pressure to control healthcare spending.

"We are focused on increasing hospital operational efficiency — providing meaningful clinical and economic improvements for customers, reducing costs associated with readmissions and post-acute care, and helping the system more effectively manage populations of chronically ill patients," Ishrak wrote in .

Medtronic already has contracts to operate cardiac catheterization labs in some European hospitals. Company officials also group products like its remote-monitoring health-data sensors and telehealth services under its solutions umbrella because they can move healthcare out of traditionally expensive acute-care and post-acute hospitals.

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